The Bank of England and the European Central Bank have left interest rates on hold as expected at 0.5% and 1.5% respectively.

As I mentioned in my update this morning there had been talk of a hint towards further QE from the Old Lady but this did not materialize and the Pound has enjoyed a welcome rally, albeit small, after a few days in the doldrums. Traders have been caught short and forced to cover but they'll also be waiting to see what happens at the ECB press conference.

The FTSE has also seen a sell- off on the news predictably, as interest rates stay on hold, and we've seen a move down to 5305 so far from 5366 prior to the announcement. I did mention selling rallies and I hope some of you did.

Perhaps the BOE are keeping their powder dry for the G7 meeting this weekend as I suggested earlier and it will be interesting to see just how ECB President Trichet plays his cards in the usual tense affair that is the regular press conference, on its way at 13.30 BST.

GBPUSD has been up to 1.6053 from 1.5960 but run into sellers and is now back down to 1.6011 while EURGBP  is trading lower at 0.8770  ( GBPEUR 1.1400 ) from 0.8816 ( 1.1350 ) prior to the BOE announcement.. I'm hearing talk on the streets of a UK clearer being a big seller of this pair and so far we've seen a low of 0.8760 (1.1420)

EURUSD is little changed around 1.4040 but all that is inevitably going to change shortly as Mr Trichet takes his seat…….

Weekly Economic Calendar-HERE

Interbank Rates as of 13:11 BST





















Agree or disagree? Then please leave a comment in the box below or contact me by e-mail.

Mike ‘Oscar’ Paterson has been in the Forex trenches for nearly three decades working as a senior Spot trader in London at UBS, Chief Dealer FX at the State Bank of Victoria and in charge of Spot CHF at Credit Suisse with a daily turnover in excess of $1.5 billion. Mike now works as an independent consultant providing a fully bespoke service to the corporate and private sectors in physical FX delivery as well as guiding those who wish to improve their currency trading. Mike also presents seminars and workshops and writes for a number of publications.
To contact Mike please call +0044 (0) 1732 700383 or email
The views expressed above are those of the author and should not be taken as investment advice. MSP Foreign Exchange Services will have no liability for, or to, any persons executing trades based on the content above.

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